The purpose of this paper is to establish a concept of the role of Community-Based Rural Tourism (CBRT) in community development and the significance of Community Participation in order to bring a change in community socioeconomic status through active involvement in community-based rural tourism. The paper pointed out several factors which determine the meaningful and active participation of community members in Community-based rural tourism based on extensive review of related literature. Moreover, the paper articulated the factors which point out the need for collaboration with stakeholders and the importance of tourist satisfaction in ensuring long term benefits through community-based rural tourism. The present paper will be quite helpful in establishing the concept of interdependence between CBRT and community participation, CBRT and tourist satisfaction, CBRT and environment conservation, CBRT and stakeholder collaboration, and the concept of using CBRT as an instrument for community development.